Are your real estate clients prepared for a cyberattack? Short answer: probably not, and that gap presents both risk and opportunity for brokers to lead with concrete safeguards.
Why this matters
- Real estate processes handle highly sensitive data (personal details, financial info, IDs). A breach can erode trust, trigger regulatory consequences, and disrupt closings. For example, industry reports highlight frequent data breaches and rising cyber threats targeting real estate firms, underscoring the need for proactive protections. This makes cyber resilience a differentiator for client service and reputation.
Quick risk snapshot
- Data at risk: client records, documents, payment details, and communications stored in email and cloud platforms.
- Consequences: cost of remediation, business interruption, regulatory notices, and potential liability from data breaches.
- Industry trend: cyber incidents affecting real estate agencies occur with increasing frequency; many firms lack formal response plans.
Practical steps for brokers to implement
- Client data minimization and hygiene
- Collect only essential information, encrypt sensitive data, and implement strong access controls across CRM, email, and document storage.
- Regularly review vendors and data-sharing agreements to ensure they meet security standards.
- Incident response planning
- Create a clear incident response plan (IRP) that defines roles, notification timelines, and recovery steps.
- Conduct tabletop exercises with staff to practice detection, containment, and recovery.
- Security safeguards for everyday operations
- Use multi-factor authentication (MFA) for all accounts, enforce strong password policies, and enable account monitoring/alerts for suspicious activity.
- Keep software up to date with patches, apply email security measures (phishing awareness, domain spoofing protections), and sandbox risky attachments.
- Implement data backups with offline and immutable storage to recover quickly from ransomware or data loss.
- cyber liability insurance as a backstop
- Consider cyber liability insurance to help cover incident response, legal costs, notification obligations, and potential third-party claims.
- Verify policy scope matches real estate activities (data breach, cyber extortion, business interruption, regulatory fines, and vendor management).
- Client communication and trust
- Proactively communicate security practices to clients: how data is stored, who has access, and what happens during a data breach.
- Provide clients with simple, actionable guidance on recognizing phishing attempts and safeguarding their own information during the transaction process.
How to talk about it with clients
- Start with the risk: explain that cyber threats can affect document integrity, payment scams, and identity theft, potentially derailing closings.
- Offer protection: outline steps you’ve implemented (MFA, encrypted storage, IRP, cyber insurance) and how they benefit clients.
- Provide resources: share a simple checklist for clients to use during the transaction, plus steps to take if they suspect a breach.
A recommended starter checklist for your practice
- Do you use MFA on all business and client-facing accounts?
- Are sensitive documents encrypted in storage and in transit?
- Is there a documented incident response plan with assigned responsibilities?
- Are regular security training and phishing simulations conducted for staff?
- Do you have a recent backup strategy with tested restoration?
- Is cyber liability insurance in place or under consideration?
Citation: The points about data at risk and the rising frequency of cyber threats in real estate, as well as the role of cyber insurance in mitigating costs, are supported by industry sources noting data breaches and insurance considerations in the sector. Additionally, general industry reporting on data handling and breach consequences informs the recommended safeguards.